United States

American shares stabilised on Thursday as investors reasserted the rotation to small caps. The Dow ended the day up 0.20% to 39,935, and the Russell 2000 advanced 1.33% to 2,224.61. The S&P 500 and the Nasdaq were both in the red as an attempted rally in tech stocks earlier in the day fizzled out. The S&P 500 was lower by 0.5% to 5,399.22, and the Nasdaq Composite was down 0.93%.

GDP data released on Thursday showed that the economy expanded at a 2.8% annualised rate in the second quarter. This was a much better result than the expected 2.1% growth rate. The numbers were boosted by strong consumer and government demand, as well as an inventory build-up. Inflation numbers released showed that core personal expenditure prices were up 2.9% for the quarter. This number is the Fed’s preferred measure of inflation. Tonight, the monthly PCE will be released for June, giving a more up-to-date reading of inflation. Both numbers released on Thursday were interpreted as indicating that the US economy is stronger than expected and that the avoidance of a recession could be achieved with a soft landing. Janet Yellen, the Treasury Secretary, said of the numbers that they are “affirming the path we’re on to steady growth and declining inflation.” Expectations of a rate cut in September but not earlier firmed after the data. The US 10-year government bonds rallied, with the interest rate falling 4bps to 4.24%.

This interpretation of the economic landscape encouraged the rotation into the broader market. Energy, financial, and industrial stocks performed better on the day as the tech sector fell. Nvidia and Meta both fell 1.7%, while the ETF issued by VanEck on semiconductor shares was down 2%.

Europe

European indexes were lower on Thursday, with the exception being the FTSE. The Dax fell 0.48%, and the CAC was down 1.15% to 7,427. The Euro Stoxx 600 fell 0.71%. The FTSE was the outlier, gaining 0.40% to 8,186.

Unilever surged 6.23% on the FTSE as the consumer goods giant raised its full-year guidance. They reported sales growth across all sectors of the company. In contrast, Nestlé shares slumped 5% as they lowered guidance and missed analyst expectations of sales growth. The company cited that consumers were baulking at the price increases in branded food, water, and pet care products.

*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.

Commodities

Copper closed a little higher on Thursday, up US$18 to close at US$9,122 per tonne. It recovered from earlier losses in the day as global growth concerns continue. Oil advanced further, with WTI crude rallying 0.93% to US$78.30 and Brent crude up US$0.68 to close at US$82.40. The stabilisation of global asset prices and the better-than-expected economic data were the reasons for the advance. Iron ore saw its first move up of the week. The Singapore September future contract was trading at US$102.40 in New York. This is an advance of 2.8%.

Gold, on the other hand, was sold, as it fell to a two-week low. The commodity was trading 1.43% lower at US$2,362.65. Silver was also down, falling 3.7% to US$27.84. Bitcoin was also out of favour, falling almost 2% to US$64,632. The move out of technology stocks is providing a negative sentiment to the cryptocurrency.

Economic Calendar

• US
  • Core PCE Price Index – (Jun) 10:30 pm
  • Personal income and spending (Jun)
  • University of Michigan Consumer Sentiment (Jul) 12:00 am